AUGUSTA, Maine — The debate over Canadian loggers working in the Maine woods returned to the State House on Tuesday when senators voted along party lines to reject a bill that would have denied tax breaks to timberland owners who hire foreign workers.

In the latest skirmish in a decades-old battle, Senate Republicans voted unanimously along with the body’s one independent member to oppose LD 314, which they claimed would unjustly penalize landowners forced during labor shortages to hire Canadian loggers.

The bill’s supporters, meanwhile, argued that Maine taxpayer dollars should not be flowing to landowners who export both jobs and wood to Canada when so many Maine loggers are out of work.

“I think it is very appropriate that we put some restrictions on who they are using to harvest timber because we are giving them a tax break,” said bill sponsor Sen. Troy Jackson, D-Allagash. “I don’t understand why we would want to give them a tax break if no one from Maine is going to benefit from it.”

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LD 314 would prohibit landowners who use foreign “bonded” laborers in their harvesting operations from taking advantage of Maine’s popular Tree Growth Tax program, which offers sizable tax breaks for land managed for timber. Employers are permitted by the state and federal government to hire foreign laborers when they cannot fill jobs with U.S. workers.

Jackson, a logger, insisted Tuesday that despite additional scrutiny from the state and feds, many contractors continue to hire Canadian crews to cut wood and haul it to mills across the border while Maine loggers to struggle to find work.

Forest industry representatives and bill opponents insist, however, that Canadian workers are used only when employers cannot find Mainers willing or qualified to work in more remote areas.

“The issue is the [Maine] loggers aren’t where the work is taking place,” said Sen. Chris Rector, R-Thomaston.

Jackson’s bill is identical to a measure that passed both chambers of the Legislature last year but later was withdrawn from Gov. John Baldacci’s desk in a last-minute political compromise.

Jackson and Rep. John Martin, D-Eagle Lake, claim they received assurances from Baldacci that the administration would crack down on Maine landowners or contractors accused of employment practices that disadvantaged Maine loggers.

LePage administration officials said at the time that they were delaying the hearings until a new labor commissioner was appointed. That position remains vacant, but department spokesman Adam Fisher said Tuesday he believes the hearings will be rescheduled soon.

On Tuesday, Jackson said it is frustrating for him to watch as Canadian trucks pass by his house to haul Maine wood to Canadian mills. He gave the example of a Maine-Quebec border crossing not far from Allagash where he said an average of 225 truckloads of wood crossed into the mills in St. Pamphile every day with none coming the other way.

“Why in the world are we spending Maine money to help Canadian loggers work in our forest?” asked Sen. Phil Bartlett, D-Gorham.

But the bill’s critics said contractors already are required to recruit Maine workers under state and federal law. Tampering with the popular Tree Growth Tax program, they predicted, would only hurt the Maine mills and workers it is aiming to help.

Sen. Doug Thomas, R-Ripley, said the proliferation of mills just across the border has everything to do with the high costs of electricity and doing business in Maine.

“We need to deal with it, but this is not the bill to deal with it,” Thomas said.

Sen. David Trahan, a Waldoboro Republican who is also a logger, cautioned against using Tree Growth as a means of punishment given the program’s importance in keeping land managed for timber rather than developed as subdivisions. He compared LD 314 to using a guillotine to do a job that requires nail clippers.

“The road that you open up is big, and the ramifications and ripple effects could be very damaging for the state in terms of conservation,” Trahan said.

But Democratic Sen. John Patrick of Rumford reminded his Republican colleagues about the sign LePage recently erected on the Maine Turnpike declaring Maine as “Open for Business.”

“Is it open for business for Canadian workers or are we going to start protecting Maine workers?” Patrick asked.

The bill faces additional votes in the Senate before heading to the House for consideration.